CoalBed Methane Opportunities & Project Sharing Experiences Around the World

Indonesia has one of the largest CBM reserves in the world estimated at approximately 453 trillion cubic feet.

Having signed the first CBM production sharing contract in May 2008, the Government of Indonesia has said that it intends to sign several more and had put in place a policy framework to attract investments to tap this new source of gas. Many companies are eyeing coal rich Kalimantan region which could lead to development of new LNG projects in the region.

What are the challenges ahead to develop such LNG projects ?

On the whole, Asia methane stores an estimated of about 2,100 trillion cubis feet, largely untapped. With the region’s appetite for gas growing annually about 2%, can CBM can be the answer to Asia’s growing gas needs ?

What you will receive from attending the 2nd CBMWorld 2009• Updated regulatory framework for accelerating CBM developments in Indonesia• Latest activities by companies venturing into CBM in Indonesia & their operational challenges• What is the Chinese government policy toward foreign investment in CBM, what is done to encourage production and use of CBM. Would foreign companies in the future have more choices for selecting a local partner?• Financing activities in relation to CBM• Progress on CBM in India and how integration of UCG & CBM can add value to the country’s coal fuel resources• Enhanced CBM Recovery & Production in Poland & sharing of experiences in Germany.• South Africa’s CBM Opportunities and how can new players and the govt work together to get it off the ground .• Developing a market for utilising the coal seam gas - one of the issues facing this nascent industry is- even if the gas is mined, where to market it ? CERA (Cambridge Energy Research Associates) will discuss this new source of gas and the utilisation prospects

Dr. Ing. Evita H. Legowo, who will provide the keynote address at the 2nd CBM World forum on 10-11 March 2009, said in an interview with the Jakarta Post, that “We want to attract more investment in the[Coal Bed Methane]sector.”

Dr. Evita, the Director General Oil & Gas at Indonesia’s Energy Ministry had just announced that the Indonesian government is now looking into implementing further incentives for companies that develop CBM projects in the country, all in a drive to attract more investment into the sector.

The incentive scheme being explored will include a tax facility system in which every oil and gas activity in the country is exempted from import duties for exploration equipment, and value-added tax.

CBM projects in Indonesia enjoy a relatively better production split oil and gas projects. CBM operators' profit share is 45 percent - much higher than the 15 percent and 30 percent that oil operators and gas operators get respectively.

Under its blueprint for the development of CBM, the government is targeting production of 1 billion standard cubic feet per day, or about 0.18 million barrels of oil equivalent, by 2025.

Gas production from CBM is expected to help Indonesia boost its declining gas output as Indonesia has the world's second largest CBM reserves after China, with total potential reserves of 453 trillion cubic feet.

Be at 2nd CBM World, on 10-11 March 2009 in Jakarta for further insights fromDr. Ing. Evita H. Legowo, PWHC, and other key players in Indonesia’s CBM sector, all of whom will provide insightful views on future direction and upcoming opportunities in the sector.

In an effort to attract funds into the CBM sector Indonesia announced in November 2007 it will offer investors a 45 percent production split for coalbed methane contracts. Since then, several successful contracts have been taken up.

In that same month, Director General Oil and Gas Luluk Sumiarso said the government will sign a CBM contract with PT Medco Energi Internasional Tbk (MEDC.JK), for the South Sumatra area. Then Ephindo and McLaren Resources Inc - under the flag South Sumatra Energy - together with Medco E&P, signed a CBM (Coal Bed Methane) contract with BPMIGAS in May 2008, witnessed by the Minister of Energy and Mineral Resources, Republic of Indonesia. The signing marks the first CBM Contract and signifies the beginning of CBM industry in Indonesia.

In June 2008 the government awarded two companies with coalbed methane (CBM) contracts; PT Ridlatama Mining Utama won a contract to extract gas from coal seams in a block in East Kalimantan, while PT Samantaka Mineral Prima will develop a block in Riau province.

CBM Asia Development Corp. announced in November 2008 that the Government of Indonesia awarded a production sharing contract ("PSC") for the development and production of coalbed methane on a portion of the Company's Kutai Block located in eastern Kalimantan Island of Indonesia. The PSC covers an area of approximately 760 square kilometres in the Kutai basin of Indonesia and has been granted to Kutai West CBM Inc. ("Kutai West"), a consortium established by the Company and its joint venture partners, and Newton Energy Capital Inc. ("Newton").

Studies have shown that the country has over 453 trillion cubic feet of CBM, twice the resource of natural gas. But due to a quirk in Indonesian law, the CBM potential has yet to be tapped. Indonesia differentiates between subsurface rights for coal and those of gas/oil hence would be CBM operators have to deal with both the owner of the coal rights and the owner of the gas/oil rights. In the confusion, nothing was accomplished.

At one of the contract signing ceremonies, the Minister of Energy completed his marathon-signing event, and spoke to the large assembled group for a few minutes. One of the key things he announced was that he had signed a document the prior night taking the coal people out of the equation. In the future, the gas and oil people have preference and anyone wanting to drill for CBM will deal with them and will not have to deal with both them and the coal people. As such, for a foreign company, it’s a giant step forward because it cuts the number of people involved in the deal in half.

Be at 2nd CBMWorld with the key people in the business and find opportunities in CoalBed Methane. Your participation in this conference is the gateway to your success in Indonesia’s vast gas resources!

It is generally known and accepted that Indonesia has one of the largest CBM reserves in the world estimated at approximately 453 trillion cubic feet. Coupled with policies welcoming foreign investments into the sector, and Indonesia’s rapidly growing domestic demand for Natural Gas, Indonesia’s CBM sector is now a potential lucrative cash cow for CBM investors.

We’d like to invite you to have a listen to our exclusive 2nd CBM World Interview, with top PriceWaterHouseCoopers (PWHC) executives Mr. William Deertz, head of the Indonesian Energy, Utilities and Mining practice & Mr. Antonius Sanyojaya, Taxations expert specializing in Indonesia’s Energy, Utilities and Mining industry.

Mr. Deertz & Mr. Sanyojaya address regulatory updates, investment outlook, environmental issues, barriers to investment, and how CBM will play a bigger part of Indonesia's energy mix – not to replace, but supplement LNG.

Green Dragon Gas Ltd continues to develop its large coal bed methane resource across its six blocks with joint-venture partner, CUCBM

Posted on : 28 Jan, 2009

DAILY GAS PRODUCTION EXCEEDS ONE MILLION CUBICFEET

Green Dragon Gas Ltd (AIM: GDG), the Chinese coal bed methane (“CBM”) business, today announces an update on its continued success in developing its large coal bed methane resource across its six blocks in conjunction with its joint-venture partner, CUCBM.

BLOCK

WELLS DRILLED

2008

TOTAL WELLS

COMPLETED

TO DATE

WELLS ONLINE/

DE-WATERING

CURRENT WELL DRILLING

SHIZHUANG SOUTH

15

135

47

0

SHIZHUANG NORTH

3

9

5

0

QINYUAN

8

14

10

3

FENGCHENG

5

19

13

1

PANXIE EAST

1

6

5

0

GUIZHOU

3

10

3

0

TOTAL WELLS

35

193

83

4

Shizhuang South (GSS), the Company’s most advanced gas production block, continues to increase as the de-watering wells convert to gas. The production at the Zayoun station has exceeded 33,000 cubic meters or 1,165,890 CF per day and continues to rise as the water table is reduced and casing pressures in the wells are reduced through production.

The Surface-to-In-Seam (SIS) wells drilled on the GSS block have proved successful within months of commencing production. A total of 2,880 meters was drilled in the coal seam utilizing Mitchell Energy proprietary technology, with whom the Company has a joint-venture. The first well GSS008 turned to gas production in excess of 8,000 cubic meters or 282,000 CF per day. The water table was reduced to 55 meters above the coal seam within 15 days of commencing production. The second well GSS031 is successfully de-watering with a demonstrative consistent reduction in the water table to 66 meters above the coal seam at present, alongside an increase in the casing head pressures. Gas production is expected once the water table is at the coal seam which is forecasted for the month end.

Randeep Grewal, Chairman & CEO commented:

“The SIS wells represent significant progress for the Company. The success of our GSS wells gives us the confidence to pursue and expand our development plans for the GSS block providing for significantly more horizontal wells than originally planned. The SIS wells enable greater gas drainage at a faster rate, with less surface footprint and related infrastructure. Although it is still early on the production curve, our decade long experience with coal seams allows us to appreciate the significant benefit of the SIS technology. With the application of the same proprietary technology, we are repeating in China the Australian Queensland success.”

The information contained in this announcement has been reviewed by Elton Dong, Vice General Manager Production, Bachelor of Science at Xi’an Petroleum Institute

Attend 2nd CBMWorld in Jakarta on 10-11 Mar 2009 now and get first hand information from CEO Randeep Grewal who will be presenting on his success in CBM.

For further information on the Company and its activities, please refer to the website at www.greendragongas.com

As the Chinese economy enjoys robust growth, satisfying the country’s energy appetite is becoming a daunting challenge and a top priority for President Hu Jintao and his government. And China is turning to coal as the key to their energy security.

China already relies on coal to generate three-quarters of its electricity, and the coal mining industry hires close to 7 million Chinese.

So it’s not very surprising that coal centric China wants to take advantage of coal bed methane as an alternative source of natural gas, cutting the country’s dependence on Natural Gas imports.

In 2006, it was reported that China used 1.4 billion cubic meters of coal bed methane, or 3% of the country’s total natural gas consumption.

But Beijing has set an ambitious target to increase coal bed methane output to 10 billion cubic meters annually by 2015.

This exciting announcement was made by China’s chief planner Hu Cunzi of the Ministry of Land and Resources at a press conference on Wednesday, 7 January 2009.

Over the past year and a half, the Chinese government has been rolling out a raft of preferential policies to help develop the nascent coal bed methane industry grow and establish. Tax breaks, Subsidies, waiver on import duties for equipment are paying off with foreign investment in China’s coal bed methane sector skyrocketing.

This new announcement is going to create a tremendous buzz among the coal bed methane industry representatives who will be at the upcoming 2nd CBMWorld conference on March 10-11 in Jakarta, Indonesia.

The timely conference which will bring together key players in the regional and global Coal Bed Methane industry features a critical speech Huang Shengchu, President of the China Coal Information Institute on the upcoming investment opportunities and policies for development of CBM in China.

Don’t miss out on this golden chance to quiz Huang Shengchu on the upcoming opportunities in China’s Coal Bed Methane sector.

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Speaker Profile

Mr.Julian Scales

JULIAN SCALES

Director

Kalahari Energy

Julian Scales is a Chartered Professionally Registered Electrical Engineer with in excess of 25 years experience which includes various engineering, mining, gas-exploration, power generation and related applications.

Mr Scales was involved in the exploration and technical aspects of Coal Bed Methane exploration in Zimbabwe – subsequently founding Kalahari Energy which resulted in the successful and first disco....Read more

Gavin Blyth has a Certificate in Mechanical Engineering, and for the last 15 years with Pall Corporation has gained valuable experience in the oil and gas, water, chemicals, petrochemicals, mining, food and beverage, pulp and paper and automotive markets, working as a sales manager, projects manager, and technical sales engineer. His current position with Pall Corporation is Director - Business Development Asia (Oil and Gas). Prior to joining Pall Corporation he was a manager for a multinational....Read more

Second generation in minerals and oil & gas. Randeep founded Greka in 1997 and has been Chairman and Chief Executive Officer since inception.. Mr. Grewal built Greka Group into a heavy oil & gas, transportation, refining and real estate company in the US and Greka China into one of the largest CBM companies in China. Greka China is wholly owned by Green Dragon Gas

Rehan Kausar is an Infrastructure Specialist at the Asian Development Bank's Indonesia Resident Mission. He covers the power, water, and transportation sector for Indonesia. He started his career in the energy sector primarily focusing on the oil and gas sector and later after a brief stint in the telecommunications industry, he worked as a consultant in the energy and petrochemical areas prior to joining the World Bank as a staff consultant on infrastructure policies. He later joined the Asian ....Read more